In the event of a premium default, which provision helps to keep a policy in force?

The automatic premium loan provision is designed to help keep a life insurance policy in force in the event that the policyholder defaults on a premium payment. This provision allows the insurer to automatically use the accumulated cash value of the policy to cover the unpaid premium, thereby preventing the policy from lapsing. If a premium payment is not made by the end of the grace period, this provision ensures that the policyholder does not lose their insurance coverage due to non-payment.

In contrast, other options provide different types of assistance in managing policies. For instance, the grace period provision allows a policyholder a specified time frame after a premium due date in which they can still make the payment without the policy lapsing, but it does not automatically cover the premium. The reinstatement provision allows for the policy to be reactivated after it has lapsed, typically after the payment of overdue premiums. The non-forfeiture option pertains to options available to policyholders in the event of policy surrender or lapse, allowing them to receive the policy's cash value instead of losing their investment.

The automatic premium loan provision specifically addresses the issue of maintaining coverage despite a premium default, directly linking it to the functionality of life insurance policies. This makes it the most appropriate choice in this scenario